5 Essential Points to Keep in Mind Before you Visit a Pawnshop
A lot of people depend on pawnshops to get short-term loans that might be difficult to get from a bank or traditional money lenders. A hassle-free application process, no credit checks, low-interest rates are some of the reason why pawn shops have become quite popular in the UK. However, before you visit a pawn shop, there are certain essential points that you need to check. So, if you
applying for a pawn loan for the first time, here are the 5 main things that you need to keep in mind.
1. How do Pawn Shops Work?
Before you choose a pawn shop, it is necessary to understand how do pawn shops work. Pawnshops are essentially money lenders. The only difference is pawn shops provide short-term loan and keep your valuable asset as collateral. Unlike banks, pawnbrokers loans online accept different types of assets as collateral. So, if you have a rare book, classic car or an expensive purse, you can easily get a loan by handing your asset over to the pawn brokers for a short while in exchange for funds.
2. Is the Pawn Shop Reliable?
With a large number of pawnshops available in the UK, selecting a reliable pawnbroker can be a difficult task. To make your experience smooth and hassle-free, make sure you research the pawnbroker before making the final decision. Relying on the experience of a friend, colleague or relative is not enough when it comes to selecting a pawn shop. An easy way out is to search the
internet and read review about the pawnbroker.
3. How Much Interest do you Need to Pay?
The interest rate on the pawnbroker loans online is an important factor that you need to consider when taking a pawn loan. The interest rates are in fact lower than what other high street lenders may charge from a borrower. Reliable pawnbrokers such as Unbolted will explain the fee involved in the transaction and mention them in your contract. In addition, if you repay the loan amount in advance, you don’t pay a penalty. The interest rate is applicable only for the actual period for which you use the loan amount.
4. What is the Penalty if you don’t repay the Loan?
When it comes to a bank not repaying the loan on time can affect your credit score and history. However, this is not the case with pawn loans. Defaulting on a loan will never have a negative impact either on your credit history or your credit score. The reason is pawnbrokers give the loan based on the collateral that you give as security. So, in case you are unable to pay back the borrowed amount, the collateral that you deposited as security will be sold.
5. How will your Asset be Valued?
The loan amount that you will get from the pawnbroker depends on how the asset is evaluated. The value of your asset will be evaluated based on the current appraised value and the condition. Reliable pawnbrokers have a team of experts who use various research tools to determine the value of an item and to ensure that you get maximum value for the asset.
Last Few Words
Anyone can require sudden financial loans for many reasons. With the help of pawnbroker loans, you don’t need to worry about your credit score or financial history. However, before you select a pawnbroker, make sure you consider the important points mentioned above.
